83% of North American organizations and 77% of European organizations have stated that they have in place a Corporate Social Responsibility strategy (CSR). While often CSR can be perceived as an ethical and broad-minded commitment, it has many other benefits for enterprises.
What is the social responsibility of an enterprise?
According to the Business Development Bank of Canada, ‘Corporate Social Responsibility is a company’s commitment to manage the social, environmental and economic effects of its operations responsibly and in accordance with public expectations’.
Is CSR a result of globalization?
Globally, CSR has been adopted by companies to address major challenges facing stakeholders, such as climate change and the inequalities between industrialized and developing countries. The Sustainable Development Goals (SDG) adopted in 2015 by the United Nations, describes a broad outline of what organizations should aim to achieve.
In Canada, CSR encourages responsible corporate behaviour to increase profitability and bring economic benefits to Canada and all the countries in which these businesses operate.
Canadian companies are not required by law to publish reports stating their commitment to CSR ‘except banks and other financial institutions with equity of $1 billion or more’. However, this does not prevent many companies from doing so on a voluntary basis and highlighting their CSR involvement in their annual reports.
What constitutes as a good CSR policy?
Good governance and especially CSR can include the following elements:
- Enterprises work with partners in ethical business practices
- They prioritize transparency in all business activities
- They anticipate and better control risks
- They improve employee quality of life at work
- The company’s commitment to its ecosystem on a social, societal and environmental scale
- The promotion of gender parity
What are the advantages of a good CSR policy?
Opting for good governance and applying CSR principles gives you many benefits, regardless of your industry. Here are the main ones:
Positive Corporate Image
- 40% of an organization’s reputation is attributable to its social responsibility policy. This is the cumulative rate of 3 dimensions: governance, work environment and commitment of the company.
- Enjoying a positive image allows you to attract the best talent. 75% of millennials say they would be willing to be paid less to work in a company that promotes corporate social responsibility.
- More and more public and private actors are integrating CSR criteria into their purchasing policies in order to control their societal impact and image. These organizations will of course favour responsible suppliers in order to be consistent in their approach. Undertaking a CSR approach therefore makes it possible to access new markets and stand out from competitors.
- Responsible corporate policy is an important differentiator: 66% of global consumers would be willing to pay more for products or services from companies that fully apply CSR.
- Many financial institutions and investors choose to favour companies that respect environmental and social standards, for example, since 2009, Desjardins have been offering SocieTerra portfolios to invest in companies that adopt good environmental and societal practices.
Promotion of Sustainability
- Contrary to popular belief, the implementation of a CSR policy allows, in the medium term, to save costs, for example by reducing the use of paper, saving energy resources, prevention of absenteeism, or a better anticipation of legislative developments.
- CSR can even improve its overall performance. It is proven that the implementation of a CSR policy allows a productivity increase of 13% compared to companies that do not integrate into their strategy,
- By limiting the use of paper, a company demonstrates its capacity to tackle wastage and to contribute in a positive way to the environment.
On a final note
The Canadian Business for Social Responsibility (CBSR) Think Tank stresses that failure to implement or partially enforce corporate social responsibility (CSR) principles can put the company at significant risk and miss many opportunities for business. In fact, these principles must be “integrated into the governance of the board so that stakeholders and their interests are protected and enhanced.”
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